As a Coca-Cola investor, you believe that the company cannot afford to be involved in ethical/moral issues. Global trade means that you may have to do business in countries that you may not necessarily like. You are disappointed in the protests and upset by what the student activists are doing to bring negative publicity to your business, but you believe that they are simply ill-informed and naïve. You believe that companies have very little power to change the racial policies of other countries, and given the United States’ relatively recent passage of acts like the Civil Rights Act; it’s hypocritical of the students to demand that South Africa change course so quickly.
You also recognize that withdrawing from South Africa would mean that blacks would actually be harmed through the loss of work that these companies provide to blacks, even if they are underpaid now. In fact, some black South African leaders have actually expressed support for keeping business in South Africa, including Buthelezi, President of the Inkatha Freedom Party in South Africa, a black political group in one of the South African homelands.
You are also critical of the investors who wish to adopt the Sullivan Principles, which would seek to make slow changes within the country of South Africa. You believe that this is not the place of business, which should focus solely on making profit. If investors do not wish to hold stock of a company doing business in South Africa, they should sell it, but they shouldn’t dictate to the managers how to make money—that’s not the job of shareholders.
For a good article (and primary document) on what other investors "in your day" are thinking, check out the following Orlando Sentinel article:
Companies have very little power to effect change in South Africa, and it’s not their business to try to do so.
Blacks actually benefit from the business of companies like Coca-Cola, who provide them with jobs.
Making decisions about whether or not to invest in a country is the decision of the managers of the company, not its shareholders. Morality and business do not mix.
If investors wish to change the policies of another government, then they should talk to their members of Congress and write to politicians. Companies exist to make money, not to make the world a better place, so you can’t expect them to change the racial attitudes of another country’s government.
President of the KwaZulu homeland, Buthelezi, has stated that companies leaving South Africa would hurt blacks more than it would hurt the apartheid regime, and it is not clear how leaving would help force the government to change its racial policies. President Reagan agrees with you and believes we must maintain our alliance with South Africa not only for economic reasons, but to help balance against the Soviet Union and ensure South Africa does not fall to Communism.
If we start trying to choose which countries we invest in based on moral questions, where does it end? Do we stop doing business in all countries based on their human rights record? If so, many countries treat women poorly as well, and we should leave them.
Key Quotes supporting your position - One comes from President Reagan, who (when asked about maintaining the US alliance with South Africa despite their racist policies, asked "Can we abandon a country that has stood by us in every war we have fought? A county that, strategically, is essential to the free world in its production of minerals that we all must have? If we're going to sit down at a table and negotiate with the Russians, surely we can keep the door open and continue to negotiate with a friendly nation like South Africa."
John Blashill, African correspondent for Fortune Magazine, wrote in 1972 that "Those who cry abandon ship have not consulted the passengers. Many of South Africa's blacks, on whose behalf the issue is supposedly being fought, want U.S. business to stay. According to Lucy Mvubelo, general secretary of the National Union of Clothing Workers [a South African trade union], 'if the Americans withdraw, it will lower the general standard of living here, and the Africans will be the first to suffer.'"
How you "win" the simulation:
Your group must get the board to adopt a resolution which does all of the following:
Issues a public statement rejecting the calls to disinvest from South Africa
Provides a rationale for why Coca-Cola should not leave South Africa
Provides a rationale for why Coca-Cola should not adopt the Sullivan Principles, as some of their shareholders wish them to do
You should prepare a written resolution for the board to adopt and a written justification for why they should adopt it, which your group members will take turn reading at the meeting.
Here's an example for how to word a resolution... keep the parts in bold and change the rest of the wording:
Whereas, We consider that recreation is a necessary part of a child's education; and
Whereas, There is no public ground in this village where our school children can play; therefore be it
Resolved, That it is the sense of this meeting that ample play grounds should be immediately provided for our school children.
Resolved, That a committee of five be appointed by the chair to present these resolutions to the village authorities and to urge upon them prompt action in the matter.
You also recognize that withdrawing from South Africa would mean that blacks would actually be harmed through the loss of work that these companies provide to blacks, even if they are underpaid now. In fact, some black South African leaders have actually expressed support for keeping business in South Africa, including Buthelezi, President of the Inkatha Freedom Party in South Africa, a black political group in one of the South African homelands.
You are also critical of the investors who wish to adopt the Sullivan Principles, which would seek to make slow changes within the country of South Africa. You believe that this is not the place of business, which should focus solely on making profit. If investors do not wish to hold stock of a company doing business in South Africa, they should sell it, but they shouldn’t dictate to the managers how to make money—that’s not the job of shareholders.
For a good article (and primary document) on what other investors "in your day" are thinking, check out the following Orlando Sentinel article:
John Blashill, African correspondent for Fortune Magazine, wrote in 1972 that "Those who cry abandon ship have not consulted the passengers. Many of South Africa's blacks, on whose behalf the issue is supposedly being fought, want U.S. business to stay. According to Lucy Mvubelo, general secretary of the National Union of Clothing Workers [a South African trade union], 'if the Americans withdraw, it will lower the general standard of living here, and the Africans will be the first to suffer.'"
How you "win" the simulation:
Your group must get the board to adopt a resolution which does all of the following:You should prepare a written resolution for the board to adopt and a written justification for why they should adopt it, which your group members will take turn reading at the meeting.
Here's an example for how to word a resolution... keep the parts in bold and change the rest of the wording: